US Tariffs on EU Goods

Question

15:08:00

Asked by

To ask His Majesty’s Government what assessment they have made of the implications of tariffs imposed by the United States of America on EU goods for trade in Northern Ireland, having regard to the Windsor Framework.

My Lords, I am grateful to my noble friend for raising this issue. Northern Ireland is part of the United Kingdom customs territory and internal market. Northern Ireland exporters will not be impacted by these new US tariffs any more than exporters from elsewhere in the UK. We are looking closely at the retaliatory tariffs announced by the EU and any impact that they might have on Northern Ireland businesses. Under the Windsor agreement, where US imports into Northern Ireland do not subsequently enter the EU, traders can reclaim any additional duties through the duty reimbursement scheme.

My Lords, I thank my noble friend the Minister for her response. Bearing in mind that the Windsor Framework is a device to protect delicate trading relationships in Northern Ireland in the post-Brexit era, can she outline what work is being done with regard to potential tariffs imposed on EU goods by the USA, which could impact on Northern Ireland? What will be the impact on the most vulnerable products and markets? What discussions have taken place with the EU and the American Administration regarding mitigations to protect businesses?

I would like to reassure my noble friend that we will always act in the best interests of all UK businesses, which of course includes those in Northern Ireland. We continue to look closely at the details of the retaliatory tariffs announced by the EU and any impact they might have on businesses. We are in regular contact with our partners in the US and the EU, as well as businesses in the UK. An important mitigation is already in place under the Windsor agreement. Where goods do not subsequently enter the EU, the duty reimbursement scheme enables traders to reclaim EU applicable duties in full without any limit on total claims. The customs duty waiver scheme also allows duties to be waived entirely, subject to an overall limit.

My Lords, bearing in mind that the issues raised by the noble Baroness are seen by Northern Ireland business as raising huge complexities, will the Minister consider the practical step of issuing a weekly bulletin in Northern Ireland so that tariffs and other regulations appear to business- people to be less like an anarchic board game?

Comprehensive guidance is available on GOV.UK and businesses can contact HMRC for more information about the reimbursement schemes. I will take back the noble Lord’s general comment about how we can improve those communications.

My Lords, the fundamental problem is that part of the United Kingdom, Northern Ireland, is forced to impose tariffs on US imports in a situation where the rest of the UK may not. That is without any reference to the UK Government, this Parliament, the Northern Ireland Government or the Northern Ireland legislature, so that colonial set-up has to be rectified. In the absence of a rectification of the fundamental problem, the Minister referred to the tariff reimbursement scheme, but the head of Manufacturing NI said in the Financial Times that the scheme is “nonsense” and full of red tape, and that “few companies have been able to successfully navigate it”. He knows about business. Is he right, or do the Government know better?

The duty reimbursement scheme is an established scheme that businesses have been using to make successful claims since 30 June 2023. As I have said, comprehensive guidance is available on GOV.UK and businesses can contact HMRC if they need more information to support their claims.

My Lords, I refer to my interest as chair of InterTrade UK. Paragraph 47 of Safeguarding the Union says that the United Kingdom is not just a political union but an economic union. Given that, and bearing in mind what other noble Lords have said, how can we deal with the economic problems of tariffs coming from either the European Union or the United States of America? How do we make it simpler? The Minister said that it is an established scheme, but it has been in place for less than two years and has not had to be activated until these tariffs have come to fruition. We need to find a way to make it easier for companies and to deal with it proactively.

This is all predicated on the Windsor Framework, which removes unnecessary checks, paperwork and duties and fixes a lot of the problems for parcels and medicines applying across the whole of the UK. It also enables important democratic scrutiny through the Stormont brake. There are those protections in place, and we are continuing to look at the operation of the Windsor Framework as we go forward.

My Lords, last week, at the St Patrick’s celebrations in Washington, the Northern Ireland Secretary restated the Government’s commitment to reaching a trade agreement with the United States, which we strongly welcome. At the weekend, however, former House Speaker Nancy Pelosi threatened that Congress would veto any trade deal that does not respect the 1998 Belfast agreement. Given that the 1998 agreement upholds Northern Ireland’s position as an integral part of the United Kingdom and the fact that the United States is the largest market for Northern Ireland goods outside Great Britain and Ireland, can the Minister confirm that it is the Government’s intention that any US trade agreement will benefit Northern Ireland in exactly the same ways and on the same terms as all other parts of our country?

My Lords, as noble Lords will know, we are working to find a new relationship with the US and to build on the strong economic relationship we have, which is fair, balanced and reciprocal. Of course, that will have to take into account the interests of Northern Ireland as well.

My Lords, given that all parts of the UK economy are so integrated with that of the European single market already, and that the tariffs from the Trump Administration are economic coercion and not based on any trade policy, I have two questions for the Minister. First, have we triggered the enhanced co-ordination mechanism within the Windsor Framework process, to ensure that any retaliatory action is co-ordinated across the European Union and the United Kingdom? Secondly, considering that this is economic coercion and illegal under WTO rules, what instructions have our Ministers given to our representative at the WTO to complain against the Trump Administration’s practice?

My Lords, it is of course disappointing that the US has imposed global trade tariffs. We are determined to support UK businesses across the sector. The Government are working with the affected businesses but, as noble Lords will know, standing up for industry means finding solutions to the global challenges we face. That means working closely and pragmatically with the US to press the case for UK business interests.

My Lords, the review of the trade and co-operation agreement between the European Union and the United Kingdom will take place next year, 2026. If the Minister thinks that things are working smoothly, or that it is easy for businesses to operate, she is under a misapprehension. Have the Government started work on what the review should deal with? Do we have a policy? What consultation will the Government undertake as they prepare their negotiating position?

My Lords, the Government are seeking to strengthen and reset the relationship between the EU and the UK. Taking forward our manifesto commitments on that relationship will carry tangible benefits for businesses in Northern Ireland and the UK. The Government are committed to abiding by commitments in international agreements, including working to the Windsor Framework in good faith. That will include new negotiations going forward.

My Lords, I hear the Minister say that there will be a reset of relationships between the UK and the EU but, if that happens, it may mean that those extra tariffs from the US will impact more on the United Kingdom as a whole. At some stage, the UK Government might have to choose between being closer to the USA and closer to the EU. Which is it?

My Lords, we will always ensure that we protect the interests of all UK businesses, including those in Northern Ireland.

Does the present position not demonstrate that Britain is being left behind in the negotiations between all the different partners in America and Europe? This is a reflection of our decision to leave Europe, and leave ourselves exposed to these measures.

My noble friend is right that we need to strengthen and reset our relationship with the EU, and that is exactly what we are attempting to do now.